- The Washington Times - Thursday, September 23, 2004

US Airways plans to return to bankruptcy court today to ask a federal judge to impose pay and benefit cuts on its unions as the airline restructures its business operations.

The threat of a court order for “interim relief” failed yesterday to force major unions still negotiating with US Airways to accept the salary reductions that the airline says it needs to regain profitability.

The unions said they would continue to seek new labor contracts through negotiation.

“We’re committed to reach an agreement, regardless of whether the company seeks interim relief or not,” said Jack Stephan, spokesman for the Air Line Pilots Association (ALPA), the union for US Airways pilots. “This is an interim relief. It’s not a final proposal, and it’s not an ultimatum.”

US Airways proposes cutting its pilots’ salaries by 19.5 percent. An average salary for US Airways pilots is about $130,000 per year, which is comparable with other major airlines.

The bankruptcy court in Alexandria is not expected to rule today on whether to cut employees’ salaries and benefits, but instead to set a hearing date to consider the evidence before making a decision.

US Airways’ chief executive officer, Bruce Lakefield, announced his intent to seek the court order unless unions accepted the airline’s proposals in a message to employees on Wednesday.

“If we were to do nothing during the traditionally slow fall and winter months, the drain on our cash reserves would jeopardize the company’s future and everyone’s job,” Mr. Lakefield said. “If we do not immediately reach agreements on interim relief, we will then file a motion with the U.S. Bankruptcy Court on Friday, Sept. 24, for authority to implement our request.”

Only hours earlier, ALPA’s executive council announced that it would resume negotiations with US Airways after earlier talks on a new contract stalled.

In addition to ALPA, US Airways employees are represented by the Association of Fight Attendants, the Communications Workers of America (CWA), the Transport Workers Union (TWU) and the International Association of Machinists and Aerospace Workers.

The unions already granted $1.9 billion in concessions after US Airways’ earlier bankruptcy in 2002.

The Association of Flight Attendants said late yesterday that the deadline set by US Airways would not force the union to accept a new contract.

“At this point, it is unlikely we would be prepared to meet [with the company’s negotiators] prior to the company filing a motion tomorrow,” said David Kameras, spokesman for the flight attendants.

The CWA, from whom US Airways is asking a 23 percent wage cut and further reductions in retirement contributions, still was negotiating with the company last night.

On Tuesday, US Airways announced it reached a tentative agreement with its 150 flight dispatchers to save the airline $4.5 million a year.

Officials with TWU Local 545 said the dispatchers agreed to the wage, benefit and work rule concessions to avoid the risk that the bankruptcy court would order more drastic contract revisions.

Although the agreement with the dispatchers is small, it is the first new labor agreement that US Airways reached with its unions since its Sept. 12 bankruptcy.

The airline has said it seeks $800 million a year in labor contract savings as part of a total $1.5 billion in cost cuts.

However, US Airways’ estimate on the concessions that it needs continues to rise as legal fees and creditors chip away at the airline’s revenue.

Last week, Brazilian regional jet maker Embraer said it would cut its deliveries of jets to US Airways for the next two years because of the bankruptcy filing.

The one hundred 50- to 70-passenger jets were a big part of US Airways’ plan to transform into a low-cost carrier.

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